The Explorers 2010: Apache Corporation

Apache is the biggest newcomer to Cook Inlet in many decades. The large Houston-based independent arrived in July 2010, acquiring nearly 200,000 acres in the Cook Inlet basin from Daniel K. Donkel and Samuel H. Cade, and other individual investors. That may have surprised industry watchers worldwide, who expected Apache to buy some or all of BP’s assets on the North Slope. In Alaska, though, the rumors said Apache would bid for Cook Inlet acreage. Apache has since acknowledged that it approached several other players in addition to Donkel and Cade, and said it wants to acquire more acreage.

Although Apache acknowledges the natural gas market in Southcentral, where reserves remain undeveloped and local utilities need supplies, the company is focused on oil, and found the Cook Inlet interesting in part because it believes there is untapped potential in the region where oil was first discovered in commercial quantities in Alaska, before the discovery of Prudhoe Bay. Although Apache doesn’t have immediate plans to open an Alaska office yet, the company said it doesn’t dilly-dally. It plans to acquire more acreage, shoot 3-D seismic in 2011 and possibly drill as early as 2012. Having earned nearly $9 billion in revenue in 2009, Apache can afford to drill where it wants.

Current exploration focus:

Cook Inlet: Apache’s initial lease acquisition is spread across the entire Cook Inlet basin, as far north as Wasilla and as far south as Anchor Point, with onshore and offshore blocks on both the west side and east side of the inlet. Apache is an oil-focused company, but acknowledged the local natural gas market. Apache is focused on the Tyonek and Hemlock formations, and believes it can conduct most of its exploration work from land.